The last thing many troubled homeowners want to hear is that they could be denied a car loan after they get a chance to modify their home loan. But credit scores can get dinged after a home loan modification, making it more costly or tougher to get a loan or credit card.
Hundreds of thousands of homeowners find themselves in a financial squeeze, thanks to the recession and the meltdown in the housing market. Lenders have offered trial loan modifications to more than 700,000 eligible borrowers. As of late November 2009, about 31,000 trial loans have been made permanent, which requires at least three on-time payments under the trial program and proof of income.

What these troubled homeowners don’t realize is that these attempts to avoid foreclosure may result in their credit scores taking a hit. A potentially damaged credit score is one of those hidden costs of home loan modification—and it varies significantly depending on your lender, as well as when you received your loan modification, your credit history and how your loan was altered.

“They need to tell people up front that this could happen,” said James Sperr, of Belleville, Mich. Sperr and his wife, Carol, received a trial modification that cut their house payment, including taxes and insurance to $957 a month from $1,140 a month. But it came with a hit to their credit score. “Our credit rating has gone from the 800s to 750,” Carol Sperr said. “It’s punitive to a consumer who is already scared, frustrated, mad,” said John Ulzheimer, president of consumer education for Credit.com. The Sperrs said they had never been late or missed a mortgage payment, but their bank had reported them as being behind on payments. Their credit score took a hit, falling from the 800s to 750. “They tell us that once the paperwork ‘catches up’ and the new loan is finalized, they will correct the credit reporting agencies,” Carol Sperr said.

No one saw this coming. “I didn’t find out about our credit until they did a check on this van we bought,” James Sperr said. He said his wife was able to provide more documentation that their mortgage was in compliance so they did not have to pay a higher rate or get shut out of a loan. Others aren’t so lucky.

Loan modifications remain a good thing, but they often come with that consequence. Homeowners who face hardships but cannot traditionally refinance their mortgages can try to get a loan modification. A modification temporarily reduces the monthly payment, which can be helpful if someone’s dealing with a pay cut. Typically, the principal amount owed on the loan is not reduced or changed and the amount of debt owed is not forgiven. The federal government has programs, and banks and credit unions have proprietary programs as well.

Yet many homeowners feel blindsided when they discover that their credit score has dropped by 50 to 100 points or even more after they entered a trial modification. “What’s the point of the additional credit damage? What have they just accomplished by doing that to the borrower?” asked John Ulzheimer, president of consumer education for Credit.com.

In the first few months after receiving a trial modification, Ulzheimer said, it is possible that the initial payments would show up as a “partial payment plan” on a credit report, which turns into a negative hit to a credit score. This can be a problem even for homeowners who never have missed a mortgage payment. “It really depends on how the mortgage company decides to report this to a credit agency,” said Julie Bos, group manager and certified credit counselor for GreenPath Inc. in Grand Rapids, Mich. A homeowner who is behind on payments will see credit score damage, and that won’t change from a modification. “If you’re already delinquent, your credit is already impacted,” said John Snyder, manager of foreclosure programs for NeighborWorks America. But consumers who are making their mortgage payments are getting modifications, too, perhaps because wages were cut or jobs were lost. They may be struggling to stay current, but their credit may not be bad when they start a modification.

Some might argue that it’s not a wise move to take on more debt, such as a car loan, if a person saw a cut in pay and needed a home loan modification. But many consumers often cannot control when their car breaks down. On top of that, lenders benefit from home loan modifications because potential foreclosures can be avoided.

Unknowingly though, many consumers discover themselves boxed in later when they try to get approved for credit. “They’re concerned about the damage to their credit. They’re not happy about it,” said Bos. “If you go out and try to purchase a car in two months, you could be denied,” she said. Or you might have to get a co-signer or put down a bigger down payment or accept a higher interest rate to get a loan.

What’s even stranger is that not all home loan modifications will hit consumers in the same way on their credit reports. Consumers who modify their mortgages under federal programs, such as the Making Home Affordable and the Home Affordable Modification Program, now can do so without hurting their credit scores since those modifications are listed as a “loan modified under a federal plan” as of Nov. 1. Here’s the sticking point: If you are able to modify your loan through an individual bank or credit union’s program and not a government plan, it’s likely your credit score will be hurt. To complicate matters further, eventually a “loan modified under a federal plan” on your credit report could hurt your score, too.

Ulzheimer noted that the only reason the new reporting guidelines do not damage your credit scores is because FICO, the company that created the FICO credit score, hasn’t had a chance to study the long-term predictive value of loan modifications to credit risk.

Still, homeowners who are in trouble must realize that a foreclosure or a short sale would be listed as a charge-off or settlement on a credit report and last seven years, Ulzheimer said, while a modification would typically last a few years.

If you do receive a loan modification, ask questions and be more careful about how you handle your credit elsewhere to try to combat any potential damage.

Before making any moves, talk to a nonprofit housing counselor.

Read more: http://rismedia.com/2010-01-16/can-loan-modifications-cause-trouble-down-the-road/#ixzz0csQM23Kh

Posted in: Mortgages
Tags: consumer education, credit history, credit reporting agencies, credit score, credit scores, eligible borrowers, financial squeeze, Foreclosure, Housing Market, loan modification, mortgage payment, recession

Foundation problems may mean expensive repairs. Here’s what to look for and what you need to know to keep small concerns from becoming big headaches.

Most homebuyers are careful to have a home inspector check for foundation problems before they sign purchase papers. But that shouldn’t be the last check. Recognizing early warning signs of trouble can forestall damage that costs tens of thousands of dollars or even jeopardizes the full value of a house. Luckily, some of the warning signs are easy to spot. Here’s what to look for.

Inside hints

A floor that’s not level is one tip of a possible foundation problem. Some people can sense this easily; others never notice even when a floor sags a couple of inches.

If you’re in the latter group, there are other ways to hear your house whispering that the foundation is rising or sinking unevenly: A door begins to jam or fails to latch; cracks appear in walls, especially over doorways or windows or where walls meet ceilings; cracks open in vinyl or ceramic tile over a concrete floor. Windows that fail to budge or to close completely also hint at foundation problems, assuming the culprit isn’t just sloppy or sticky paint or rotten wood frames.

Slab foundation problems

If you have a slab foundation, a structural engineer can help determine whether these signs point to normal settling or to structural damage. Expect to pay $500-$700 for a structural engineer to inspect your foundation and provide an evaluation, and as much as $2,000 for a full set of drawings for an engineered solution.

If it’s a structural problem, your foundation is settling unevenly and has the potential to skew or pull apart the framing unless you take action. Best case: You can get the house level again just by keeping soil near the house evenly moist, either by irrigating during dry weather if you live in a damp climate or by switching to landscaping that doesn’t need irrigating if you live where it’s usually dry.

Worst case: You need to underpin the foundation with helical screws or concrete piers. Installation costs $1,200-$1,500 per pier, with one every 6 to 8 feet.

Outside, take the long view

Moving outside, check to see if your foundation is straight by sighting down the length of your foundation wall from each corner. You should see a straight line. A bulge or divot in either a block foundation or a poured concrete wall could signal that the foundation has shifted.

Check for leaning walls with a level. If the top of the foundation sticks out beyond the walls in one area, the foundation wall may have tipped. Any signs of shifting or bowing means that the soil may be expanding and contracting, putting pressure on foundation walls, and remedial steps are necessary.

The poke test

If your house has a poured perimeter foundation and it appears to be shedding sand, poke it in a few places with a sturdy screwdriver. The concrete should be so dense and hard that you do no damage. If you can excavate a hole, the concrete could be deteriorating because the mix contained dirty or salty sand, or too much water. This problem, common in homes built in the early 1900s in some parts of the country, has no remedy short of a new foundation, perhaps a $35,000 prospect.

Checking crawl spaces

In the basement or crawl space, look for foundation problems that may include a system of posts and concrete supports, or piers. Posts should stand straight and be firmly planted underneath the beams they support. Bottoms of posts should rest firmly on concrete piers.

You shouldn’t find puddles or see framing that’s wet. Check for rot by probing wood posts with a screwdriver or awl.

Puddles and other signs of moisture in a crawl space may indicate poor drainage around the perimeter foundation. Be sure that gutters aren’t plugged, and that soil slopes away from the foundation at the rate of 6 inches for every 10 horizontal feet.

Reading cracks

Concrete and block foundations usually have at least a few cracks. The trick is recognizing which are insignificant and which are serious.

As concrete cures, it shrinks slightly. Where the concrete can’t shrink evenly, it tends to crack. Cracks where there is an L-shape section, such as where a foundation stairsteps down to follow a hillside, are probably shrinkage cracks, especially if they meander and taper down to a hairline. These aren’t a structural issue, though you might need to plug them to keep the basement or crawl space dry. Hairline cracks in the mortar between concrete blocks are also rarely worth worrying about.

If you find small cracks (less than 1/16-inch wide), paint over them with a concrete waterproofing paint (about $25 a gallon). Then check periodically to see whether the paint has cracked, which means the gap is opening up under pressure.

Stairstep cracks in masonry joints are a bigger concern, especially if the wall is bulging or the crack is wider than ¼ inch. A plugged gutter or other moisture problem outside is probably exerting pressure on that part of the wall. You’ll need a structural engineer to help identify a cure, which can include bolting on steel braces ($500-$700 each, often spaced about 6 feet apart along the wall) or using epoxy to glue on straps of carbon-fiber mesh ($350-$450 each, similarly spaced).

Horizontal cracks are most serious, and indicate that water-saturated soil outside froze and expanded, pushing in and breaking the foundation. Perhaps gutters backed up and heat was off for an extended period during especially cold weather. The consequence: You probably need a whole new foundation.

Horizontal cracks also occur because of problems with underlying soil. If you have soil that expands when damp and shrinks when dry, you face the same range of solutions as if you had a slab foundation. Hire a structural engineer to help you sort out your options.

Posted in: Home Buying
Tags: foundation problems, home inspector, homebuyers, slab foundation, structural engineer

Home sales in Racine County in December. $399,000 to $600,000. There were 2 sales total.

Waterford, WI

28603 Fraiser Trail

Selling Price: $415,000

• 5 Bedrooms, 3.5 Baths
• 3,787 square feet
• $110/square foot
• 3.5 car attached garage
• Built in 2001
• 1.0 acre
• 2008 Taxes: $10,139
• Original Asking Price: $550,000
• Final Asking Price: $459,900
• Closing Date: 12/23/2009
• Total Days on Market: 221
• ONLY A JOB RELO BRINGS THIS EXECUTIVE 5 bdrm, 3.5 bath contemporary home to the market. Featuring HWF’s, dual staircase, 6 panel doors, vol. ceilings, arched entries, 4 of 5 bdrms have WIC’s. Kit. w/granite island, SS appl., snack bar & pantry. DR & LR. Master suite w/whirlpool & dbl sinks. LL w/full size windows. Awesome lot, almost 1 acre-wooded! Gorgeous in-ground heated pool 2007. Deck & MORE!

Yorkville, WI

16339 Plank Rd

Selling Price: $525,000

• 3 Bedrooms, 2 Baths
• 2,400 square feet
• $219/square foot
• 2.5 car attached garage
• Built in 1975
• 29 acres
• 2008 Taxes: $6,942
• Original Asking Price: $599,900
• Final Asking Price: $579,900
• Closing Date: 12/15/2009
• Total Days on Market: 179
• Well cared for & loved country property offers spectacular views of 29 acres including tillable farmland, a 1.4 acre stocked pond,mature trees and a 48 x 24 outbuilding. Sprawling custom built brick ranch with a huge great room, 2-way, floor to ceiling. California driftwood fireplace & cathedral ceiling open to kitchen with lots of cabinets and breakfast bar. Main floor laundry.Rec room. New roof

Posted in: Housing Market
Tags: Home Buying, home selling, market analysis, racine county, waterford, yorkville

#10: Cash Is King

If you plan on buying a home in 2010, especially a low-priced foreclosure or short sale, be prepared for competition. Demand is high for these properties, so it’s not uncommon for bidding wars to break out over them. Real estate investors are particularly tough for regular buyers to contend with: Many investors are making all-cash offers, and banks — who are often more concerned with making a speedy sale than with getting the highest price possible — are accepting these offers over higher-priced offers where loans are involved. To stand out from the competition, make your offer as attractive as possible. That means saving up a sizable amount of cash for a down payment and making an offer that’s close to — or even above — asking price.

#9: Smoother Short Sales

In 2009, short sales, or sales in which the seller’s proceeds are less than his outstanding mortgage debt, earned a reputation as being a slow — and often unsuccessful — process. After waiting months for lender approval only to hear “no” as an answer, many buyers have left the short-sale process frustrated and no closer to owning a home. Meanwhile, the seller is still stuck with a home he can’t afford and may have to face the painful process of foreclosure. In 2010, this problematic process should become much smoother. Lenders and real estate professionals alike are working on ways to streamline the short-sale process. More real estate companies are training their agents to do these specialized sales, and lenders will be more open to processing them.

#8: Tricky Appraisal Rules

Ridiculously inflated home prices in many markets contributed to the housing crisis, motivating the federal government to pass the Home Valuation Code of Conduct (HVCC) — a set of rules that determines how appraisals should be made — in May 2009. The law aims to distance appraisers from the real estate transaction so they can provide an unbiased, objective analysis of a property’s market value.

But real estate agents argue that the system is flawed and deals are falling through because of the ever-changing, lengthy maze of rules. Long story short: With the new rules in place, appraisals now take longer, are more expensive and are often conducted by appraisers unfamiliar with the local market. The National Association of Realtors has called for a moratorium to address the shortcomings of the HVCC, but until these rules are ironed out, expect them to hinder deals in 2010.

#7: A Conflicted Construction Market

According to McGraw-Hill Construction’s Construction Outlook 2010 report, new construction is expected to climb 11 percent next year. However, in October 2009, housing starts unexpectedly plunged to the lowest level in six months, leaving many wondering if construction activity is really in recovery. The low number of housing starts in October suggests that many builders cut back on new projects while waiting to hear if the first-time homebuyer tax credit would be extended. With the credit extended, we may see housing starts climb again in 2010, but because lenders are still reluctant to finance new construction projects for builders and new condo purchases.for homebuyers, inventory will continue to be a problem.

#6: Rising Mortgage Rates

In 2009, the Federal Reserve bought up a massive amount of mortgage-backed securities, keeping mortgage rates at historic lows for much of the year. However, the Fed is scheduled to end those efforts in March 2010, meaning mortgage rates could jump as much as a full percentage point next year. If you’re considering buying a home, now would be the time to take advantage of historically low interest rates. If you’re a current homeowner thinking about refinancing, act now.

#5: Lending Standards Still Tight

According to the Federal Reserve, fewer banks tightened their lending standards in the third quarter of 2009. However, that doesn’t mean lending standards have gotten looser, either. In 2010, banks will continue to keep the subprime mortgage debacle in mind and require extensive documentation and stellar credit from borrowers. If you plan on applying for a loan in 2010, take steps now to get your finances in order and boost your credit score.

#4: Stabilizing Home Values — in Some Places

According to the Standard & Poors/Case-Shiller Home Price Index released in November 2009, U.S. home prices have improved for two quarters in a row. The national index rose 3.1 percent from the second quarter to the third quarter of 2009. Likewise, the National Association of Realtors recently reported that median home prices have risen for two consecutive quarters. NAR’s chief economist, Lawrence Yun, also predicted that home prices will grow 4 percent next year. Reports like these paint an improving national picture, but locally, many markets still have a ways to go before home values recover. According to the Case-Shiller Index, Minneapolis and San Francisco showed the greatest increases in values, while values in Cleveland, Las Vegas and Tampa continued to decline.

#3: More Foreclosures to Come

Home values may be stabilizing in some markets, but challenges still lie ahead. Between rising unemployment rates, a backlog of homes already in the foreclosure process and many adjustable rate mortgages scheduled to reset next year, more foreclosures are expected to hit the market in 2010. For a housing market that’s finally starting to show some signs of improvement, a new wave of foreclosures would be a huge setback.

In an attempt to mitigate the effect of these new foreclosures, Fannie Mae has come up with a potential solution: The mortgage giant will allow some people losing their homes to foreclosure to lease those properties back for up to a year at market rental rates. The agency hopes this program will help stabilize neighborhoods by keeping more people in their homes.

#2: More Buyers Entering the Market

In 2009, the federal government’s $8,000 tax credit for first-time homebuyers was a huge topic in the real estate world. The credit was met with mixed reactions: Some said it had little impact on the housing market, while others claimed the credit encouraged thousands of on-the-fence buyers to finally purchase their first homes. The National Association of Realtors, for example, estimates 350,000 homes nationwide were sold to first-time buyers who probably wouldn’t have bought a home if not for the credit. The group also reports that about 47 percent of all home sales in 2009 will be to first-time homebuyers, up from 41 percent in 2008.

Hoping to spur the housing market’s recovery, the federal government extended the credit — which was set to expire on Nov. 30 — and gave buyers until April 30, 2010, to secure a purchase contract. The credit was also expanded to include some existing homeowners, plus buyers with higher incomes. If the original tax credit brought more first-time buyers into the market, the expanded credit should motivate current homeowners to trade up.

#1: Still a Buyer’s Market

For homebuyers, 2010 will likely be another year of low prices and a large inventory of homes on the market. Conversely, for home sellers, 2010 will be another year of low sales prices and fierce competition from other sellers. Plus, if a wave of new foreclosures hits the market next year, sellers will still have plenty of competition from bank-owned properties at bare-bones prices.

Fortunately, home sellers have many strategies at their disposal to stand out from the crowd. Today’s homebuyers are looking for move-in ready homes, and many foreclosed homes are not in the best shape when they hit the market. Preparing your home for sale — which can include cleaning, making repairs, making upgrades and staging — can help your home stand out from the foreclosure down the street and get you a higher sales price.

Posted in: Housing Market
Tags: appraisals, buying a home, cash offers, Foreclosure, home valuation, lenders, mortgage debt, owning a home, real estate investors, real estate professionals

In the short term this will be a tough pill to swallow but the housing market will benefit in the long term.

From CNNMoney.com:

It’s going to be harder to get a government-backed mortgage from now on.

Looking to shore up its weakening finances, the Federal Housing Administration is set to announce stricter standards on Wednesday.

The agency, which insured nearly a third of new mortgages in 2009, will increase the premium it charges for its mortgage insurance and require those with weaker credit scores to come up with larger downpayments.

The FHA will also reduce the amount of money a seller can provide a homebuyer for closing costs, as well as tighten its enforcement of lenders.

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” FHA Commissioner David Stevens said in a statement. “Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”

FHA loans have skyrocketed in popularity during the mortgage crisis since the agency backstops banks if borrowers stop paying. But housing experts are growing increasingly concerned about the agency’s ability to handle rising numbers of defaults. (Cash cushion shrivels for FHA.)

In November, the agency reported that its reserve fund has dropped to .53% of its insurance guarantees, well below the 2% ratio mandated by Congress and the 3% ratio it had last fall. The fund covers losses on the mortgages the agency insures.

Federal housing officials, who took several steps to shore up the agency’s finances last year, promised to do more. The new announcement is the latest set of changes to FHA policies.

What the new rules mean

The agency will increase its up-front mortgage insurance premium to 2.25%, from 1.75%. It will also ask Congress for the right to hike its ongoing premium, currently between .5% and .55% monthly.

The FHA will also require borrowers to have at least a credit score of 580 to qualify for the agency’s 3.5% downpayment program. Those with lower scores will have to pay at least 10%. However, this rule may have little practical effect since Stevens recently said the average borrower score is 693.

The new policy also will reduce the amount of money sellers can provide to homebuyers at closing to 3%, down from 6%, of the home’s price. That change will bring the agency in line with industry standards and remove the incentive to inflate appraisals.

Finally, officials plan to clamp down on lenders offering FHA mortgages. It will more closely monitor their performance and compliance with agency rules, as well as seek legislative authority to require mortgage firms to assume liability for all loans they originate and underwrite.

One thing the agency did not do is to broadly increase the downpayment requirement. Many industry observers said such a step is necessary to reduce the risk the FHA faces.

Agency plays crucial role

As banks have clamped down on mortgage lending, the FHA program has emerged as one of the few ways people can buy a home.

Banks are more willing to make FHA loans because they come with a federal guarantee to cover losses if the borrower defaults. And borrowers can more easily qualify for FHA loans because they only need 3.5% down and can have lower credit scores.

As a result, demand for FHA loans has exploded. The agency guaranteed more than $360 billion in single-family mortgages in fiscal 2009, which ended Sept. 30, more than four times the volume in 2007.

The agency insured about 30% of home purchases and 20% of refinanced mortgages in 2009. Nearly 50% of first-time homebuyers go through the agency.

The agency, however, has also seen a spike in delinquencies amid the mortgage meltdown. Some 14.36% of FHA loans were past due in the third quarter, according to the Mortgage Bankers Association. This compares to 9.64% of all loans.

Posted in: Home Buying
Tags: closing costs, credit score, downpayments, federal housing administration, fha loans, homebuyer, Mortgages

Home sales in Walworth County in December. $399,000 to $600,000. There was 1 sale total.

Fontana, WI

1015 Tarrant Dr

Selling Price: $482,500

• 5 Bedrooms, 3.5 Baths
• 2 car attached garage
• 20.46 acres
• 2008 Taxes: $8,977
• Original Asking Price: $649,900
• Final Asking Price: $549,900
• Closing Date: 12/4/2009
• Total Days on Market: 482
• Across from the 14th tee in Country Clulb Estates on a beautiful corner lot sits your 5BR/3.5BA ranch home. This cedar sided home boasts a walk-out finished LL w/2nd kit.,FR & 2 BRs. Main level great room, wet bar, DR, breakfast room, 2FPs,laundry room & screened porch. Master has his & her walk-in closets w/jacuzzi tub & walk-in shower. Cathedral ceilings & very spacious! Lake rights!

Posted in: Housing Market
Tags: fontana, Home Buying, home selling, market analysis, walworth county

In a move that could make foreclosed properties more attractive to investors and increase the number of homes available to first-time buyers, the federal government is temporarily lifting a prohibition against providing FHA mortgage insurance for homes that are resold within 90 days.

The Department of Housing and Urban Development designed the regulation to discourage the flipping of houses by investors that drove up prices during the housing market boom of a few years ago. But critics say its unintended effect has been to reduce the options of first-time buyers who already are competing for a shrunken supply of homes for sale.

Last year banks slowed the flow of properties headed to foreclosure, possibly in an effort to modify troubled mortgages to make them more affordable or to avoid posting losses when the homes are sold.

The waiver on the purchase of flipped houses with FHA mortgages, which begins Feb. 1 and is effective for one year, “will give FHA borrowers access to a broader array of recently foreclosed properties,” HUD said Friday in announcing the change.

Conditions attached to the waiver are expected to prevent what HUD called “predatory practices” by investors. For instance, when a house is resold within 90 days of purchase at a price that is 20 percent higher, the seller would have to justify the increase, such as by showing how much was spent on repairs and renovation.

Some real estate experts complain that investors who come into the foreclosure market with cash have an unfair advantage over first-time buyers who are less attractive to the banks because they frequently can afford only minimum down payments.

Other experts argue that investors perform a community service by buying and fixing up the most distressed and vandalized foreclosed houses that otherwise would be uninhabitable and ineligible for FHA financing. But they add that in many cases investors have not been able to sell the refurbished houses to FHA buyers because they could not wait 90 days to recoup their purchase, rehabilitation and holding costs.

So instead of first-time buyers with FHA mortgages getting such houses, they often have been sold to investors who have converted them to rentals or to people who could afford the larger down payments required for conventional financing.

Rich Cosner, president of Prudential California Realty with nine offices in Orange, Riverside and San Bernardino counties, said because of the FHA restriction against insuring loans on houses bought from flippers, many first-time buyers “were locked out of some of the best houses.”

Investor-owned houses that are “flipped” represent “a small but growing percentage of the resale market,” said Andrew LePage, a spokesman for DataQuick Information Systems, which tracks housing sales and prices. LePage said absentee buyers, most of whom are investors, in December accounted for 24 percent of sales in Riverside County and 28 percent in San Bernardino County.

In November homes resold after being owned no more than 180 days represented 3 percent of sales in Riverside County and 4 percent in San Bernardino County, LePage said.

More investors

Nicholas Manfredi, president of the Corona-based Inland Empire Investors Forum, said HUD’s waiver was greeted with joy by his investor colleagues.

“They were high-fiving me in the gym this morning,” he said Monday.

Manfredi said he is certain the change will attract more investors who will buy houses in neighborhoods dominated by FHA buyers. He said previously some investors shied away from these lower-price neighborhoods, which he said had the effect of perpetuating community blight.

However, Manfredi said the future of the Inland foreclosure market is too murky for him to recommend that investors dive into flipping. His biggest worry, he said, is that the change in federal policy may mean that the government expects banks to start allowing their backlog of delinquent loans to rush to foreclosure. If that happens, he said, home prices will fall and harm anyone needing to quickly sell investment properties.

Several local real estate agents, including Joyce Aragon, a sales agent for All National Realty in Ontario and president of the Inland Valley Association of Realtors, say in recent weeks they have seen an uptick in the volume of repossessed homes coming to market.

Pete Nyiri, owner of Top Producers Realty in Corona, a major broker of repossessed houses, said the number of foreclosures that banks assigned to him last month increased 40 percent and many of those have yet to be listed.

Posted in: Sell Your Home
Tags: fha borrowers, fha mortgages, first time buyers, foreclosure market, homes for sale, Housing Market, hud

Just a reminder…

FIRST TIME BUYERS

Credit: Equal to 10 percent of the home’s purchase price, up to $8,000

Who Qualifies:

• Those who haven’t owned property in the last three years
• Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)
• Must be at least 18 years of age to claim credit
• Purchase price must be $800,000 or less

Deadlines:

• Have until April 30, 2010, to enter into contract for a home purchase
• Have until June 30, 2010, to close on the purchase

CURRENT HOMEOWNERS

Credit: Equal to 10 percent of the home’s purchase price, up to $6,500

Who Qualifies:

• Those who have owned and lived in their principal residence for at least five consecutive years during the past eight years
• Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)
• Must be at least 18 years of age to claim credit
• Purchase price must be $800,000 or less

Deadlines:

• Have until April 30, 2010, to enter into contract for a home purchase
• Have until June 30, 2010, to close on the purchase

In addition, buyers have another year to take advantage of the higher loan limit for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac — set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost housing markets. The limit in normal markets will remain $271,050 for FHA and $417,000 for Fannie Mae and Freddie Mac.

What this all means is that many more buyers qualify for a tax credit. So what are you waiting for? If you’re even remotely considering buying a home, now’s the time to do it. Don’t let the first time buyers have all the fun.

Posted in: Home Buying
Tags: buying a home, fannie mae and freddie mac, federal housing administration, fha, first time buyers, home buyer, Mortgages, tax credit